Re-emerging from the rubble: What is delaying regeneration of Christchurch - CBD? - NZSEE ...
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Re-emerging from the rubble: What is delaying regeneration of Christchurch CBD? O. Filippova, K. Elwood University of Auckland. T. Collins University of Canterbury. ABSTRACT Nearly ten years since the February 2011 earthquakes devastated Christchurch CBD, partially demolished, derelict buildings and poorly maintained vacant sites remain in the post-earthquake landscape. While Christchurch City Council has made significant progress in recent years to reduce the level of vacant and derelict land across the city, several property owners remain reluctant to improve their buildings. This project documents the current inventory of derelict properties and investigates issues that are delaying progress on these sites (e.g. insurance disputes, supply and demand of commercial and residential space in the CBD, delays in consenting, absentee owners, lack of funds etc). Furthermore, we explore regulatory levers that can be used to influence action on these buildings/sites (e.g. provisions in the Building Act, compulsory acquisition etc). As we approach the 10-year anniversary of the earthquakes, this project offers a timely reminder of the mammoth struggles that the city has overcome evident in the numerous modern buildings, yet a few ‘battle sites’ slow the much-needed regeneration towards a resilient city centre. 1 INTRODUCTION The February 2011 earthquake caused widespread damage across Christchurch, especially in the central city and eastern suburbs. In the aftermath of the disaster, the city was faced with a challenge of filling in empty sites that appeared in place of the 70% of the central city buildings that came down in demolitions. The central city lost half of its workforce and 2/3 of inner-city residents were forced to move out. The rebuild was focused on attracting people back into the city. The government set plans for major anchor projects as a catalyst to boost commercial and recreational activities in the CBD, while private developers got on with the redevelopment of commercial buildings as insurance money began to flow and more land became available as edges of the cordon moved back. Paper 187 NZSEE 2021 Annual Conference
Most recent economic and residential statistics show positive signs of recovery, yet after a decade since the 2011 earthquake central city is still peppered with vacant sites and derelict buildings which are impacting re- investment in local infrastructure and are considered as barriers to successful regeneration. In this paper, we present analysis of the Christchurch City Council’s programme targeted at progressing action on buildings neglected because of the earthquakes. 2 BARRIER SITES Naturally, city centre revitalisation was among highest priorities for the Council. In 2016 the Council began focusing their attention on sites and buildings where owners have made no effort to remediate damage (CCC, 2017). The council believed that by that time, sufficient period has passed to resolve even complex insurance disputes and/or to investigate and commence reconstruction/refurbishment. At a meeting in May 2017, the Council considered a report that outlined framework and strategies for progressing action on problematic central city sites and was presented with an initial list of 30 derelict buildings and vacant sites (Ccc.govt.nz, n.d.). The list was made publicly available (Newsline.ccc.govt.nz, 2017)., quickly dubbed ‘Dirty 30’ and receiving wide coverage in the media. The combination of soft and hard measures developed by the Council were applied progressively/gradually on property owners to result in repair, restoration, or redevelopment of their sites (Figure 1). Figure 1: Barrier sites framework (Source Christchurch City Council). To encourage compliance, the Council adopted a VADE model – Voluntary, Assisted, Directed, Enforcement. The intention of the programme was to operate within the Voluntary and Assisted part of VADE spectrum. Once the soft options are exhausted, the Council would then resort to directing property owners to act by issuing notices to fix or abatement notices, with the final step being enforcement action which would fall in the realm of council bylaws and various pieces of legislation such as the Building Act, Local Government Act and Health Act. From the outset the enforcement route was not favoured within the Council and was perceived to be costly and legalistic. Since the launch of the programme, the Council was able to achieve action on majority of the barrier sites operating within voluntary and assisted spectrum. Given that a significant number of heritage buildings succumbed to the earthquakes, several buildings in the programme received generous heritage grants to assist with restoration ranging from $170,000 to $1.9 million. 2.1 Evolution of the ‘Dirty 30’ The publication of the original list of neglected properties was meant to be a living document, with sites coming off the list as plans for redevelopment were being finalised while new problem sites would be added to the list. The first list featured 31 sites and by the end of 2018 a further 14 sites were added. As evident on the map below (Figure 2), the largest cluster of sites is in the core of the city centre as most likely those Paper 187 – Re-emerging from the rubble: What is delaying regeneration of Christchurch CBD? NZSEE 2021 Annual Conference
buildings were inaccessible longer due to cordon. In fact, the post-earthquake office market has shifted its prime centre from the core with a new precinct emerging in the west end of the CBD along Cambridge Terrace. As one local property developer explained, development along the edges of the cordon resulted in ‘unloved streets’ in the core of the city with rows of vacancies and abandoned buildings. Figure 2: Map of the central city barrier sites. Table 1 provides the full list of the central city barrier sites. Twenty four of the 45 sites have been permanently removed from the list with the owners either completing or being in the process of redevelopment, including three sites that have been cleared, tidied and now held in vacant possession. Most of the buildings on these sites have been repaired/restored. A cluster of heritage buildings in High Street – also known as Duncan’s building - had their facades restored and new structures going behind. With the numerous heritage buildings destroyed in the earthquakes, preservation of these buildings is an important reminder of the city’s rich history for future generations. The Council is actively pursuing the remaining owners to take action on the sites. Thirteen owners indicated to the Council their plans for the buildings. Some of the owners have applied or already received building consents and work on those sites is eminent. These plans include the development of a new Catholic precinct in Armagh Street on the sites of the former PWC building and the adjacent cleared site of the former Copthorne hotel. The development will include a replacement for the damaged Cathedral of the Blessed Sacrament. Awaiting redevelopment, the PWC site famously became home to a colony of the endangered Paper 187 – Re-emerging from the rubble: What is delaying regeneration of Christchurch CBD? NZSEE 2021 Annual Conference
black-billed gulls (Figure 3(a)). Restoration of the Old Municipal Chambers, another prominent historic building, is about to commence as the Council entered into an agreement with a private developer to develop and lease the building (Figure 3(b)). a) PWC site b) Old Municipal Chambers Figure 3: Sites with confirmed plans for redevelopment. Most recently, plans for redevelopment of two notorious buildings featured on the list have been signalled. The first is the Malvern House – arguably the poster child of the barrier sites programme – the most tagged building in the city and a magnet for squatters (Figure 4 (a)). The other is the former IRD premisses – built in 2007, it sat damaged and vacant since the quakes (Figure 4 (b)). While redevelopment of barrier sites is a signal of recovery and confidence in the city, the Council understands a commitment to action does not always equate to completed projects. Several of the sites featured on the list have exchanged owners (some of them multiple times) since the earthquakes, with each new owner announcing plans for development only to then abandon them. a) Malvern House b) Former IRD building Figure 4: Sites likely to be redeveloped. Paper 187 – Re-emerging from the rubble: What is delaying regeneration of Christchurch CBD? NZSEE 2021 Annual Conference
Table 1: List of barrier sites and progress indicators. Street address AKA Status Scope of work Use Former Trinity 124 Worcester St Church/Shands work completed repair commercial Bldg 152 Oxford Ter Public Trust Office work completed repair commercial 81 Lichfield St Lincoln House work completed repair commercial 167-169 Hereford St Hereford Chambers work completed repair commercial original 201-203 High St Victoria Black work completed commercial façade/new build Former Work & 231 High St work completed repair commercial Income 12 Latimer Square Park Tower work completed repair residential 135 High St High Street work completed new build commercial original 143-157 High St High Street work completed commercial façade/new build original 163 High St High Street work completed commercial façade/new build original 165 High St High Street work completed commercial façade/new build 673 Colombo St Pagoda Court work completed new build commercial removed from the Catholic 143-145 Armagh St cleared site list precinct Former PSIS removed from the 128 Armagh St list cleared site tbd building removed from the 167 High St High Street cleared site tbd list Former Scorpio under 79 Hereford St repair hotel Books redevelopment under 31 Cathedral Square Old Post Office repair commercial redevelopment under 96 Lichfield St Living Space repair residential redevelopment under sport and 216 Madras St cleared site redevelopment recreation Spagalimis / 28 under 155 Victoria St new build residential Dorset redevelopment under 100 Cathedral Square Anglican Cathedral repair religious redevelopment under 129-133 High St High Street repair commercial redevelopment Paper 187 – Re-emerging from the rubble: What is delaying regeneration of Christchurch CBD? NZSEE 2021 Annual Conference
under 165 Hereford St Broadlands House repair commercial redevelopment Nuttal Bradley under 79 Cambridge Ter repair hotel Building redevelopment 235 - Brick, 237 - 235 - 237 High St plans confirmed repair commercial vacant site 92 Lichfield St Sol Square (part) plans confirmed repair tbd 159 Oxford Ter Our City plans confirmed repair office Old CCC Offices 210-214 Tuam St plans confirmed repair commercial and Odeon Theatre Kaplan/State 116 Worcester St plans confirmed repair residential Insurance Former PWC exposed Catholic 119 Armagh St plans confirmed Building foundations precinct Stonehurst 249 Gloucester St plans confirmed cleared site residential Hotel/Motel Former IRD 226-234 Cashel St plans confirmed repair medical Premises 179 Tuam St Sol Square (part) plans confirmed repair tbd Victoria Mansions, 91 Victoria St plans confirmed repair residential 368 Montreal 141 High St High Street plans confirmed repair tbd 170 Oxford Ter Old Rydges Hotel plans confirmed vacant building hotel 159 Hereford St Malvern House plans confirmed vacant building tbd cleared site w/ 158 High St Cotters intentions unknown tbd original façade Peterborough 25 Peterborough St intentions unknown repair tbd Apartments exposed 170 Cashel St Former Holiday Inn intentions unknown tbd foundations 137 Cambridge Ter Harley Building intentions unknown vacant building tbd 112-114 Manchester 2 Fat Indians intentions unknown vacant building tbd St 66 Oxford Ter intentions unknown vacant building tbd 161 Hereford St Hereford Suites intentions unknown vacant building tbd 205 Manchester St Blue Jean Cuisine intentions unknown vacant building tbd Paper 187 – Re-emerging from the rubble: What is delaying regeneration of Christchurch CBD? NZSEE 2021 Annual Conference
2.2 Enforcement tools A number of property owner seem resistant to engage in a dialogue with the council and so far have not shared any proposals for redevelopment. For the eight sites that are still unresolved, the Council is considering the use or enforcement tools. As mentioned earlier, this is not the favoured approach as the council would want to maintain the role of a facilitator rather than enforcer of change. Any legal action is likely to be strongly opposed by owners, and would amount to significant burden on the resources and finances of an already overstretched council. Nevertheless, the council has commissioned a review of enforcement tools which include a range of acts and council bylaws (Table 2). Table 2: Statutory tools favoured by the council. Legislation/bylaw Relevant section/clause Nuisance - Clause 7: Requires permits for obstructions in public Christchurch City places Council Public - Allows for fees to be charged for permits Public realm Places Bylaw 2008 - To be read in conjunction with Council ‘s Policy on encroachment Structures on Roads 2010 - Clause 20: Permits required for use of legal road - Enables charging for use of public roads and footpaths when containers/skips/fences and hoardings need to occupy public roads and footpaths - Requires TMP to be submitted with application for Christchurch City permit Council Traffic and Parking Bylaw - s357 of LGA: Offence to put something on the road or Public realm 2008 allow it to remain without Council authorisation. Offence encroachment to allow water for mud to flow from land on to a road. In a successful prosecution, defendant may be ordered to pay Council’s costs in removing materials. To be read in conjunction with Council‘s Policy on Structures on Roads 2010 s.459; Power to require work be done on private land for Local Government storm water drainage. Power to complete work, if not Temporary gravel Act 1974 done, and costs recoverable carparks . s.123: Building can be insanitary if; hazard to health, in Derelict buildings; Building Act 2004 partial building/site state of disrepair, lacks moisture penetration protection. clearance Transport - Rule: 7.4.2.3: RD6: (Restricted Discretionary): Temporary car parking activity – resource consent Christchurch City required, expires 30 April 2018. Temporary gravel Council (Operative) Transport - Rule: 7.4.2.3: RD8 (Restricted Discretionary): carparks District Plan Commercial car parking lots. Transport - Rule: 7.4.2.5 (Non complying if activity doesn’t comply with 7.4.3.1.d) Paper 187 – Re-emerging from the rubble: What is delaying regeneration of Christchurch CBD? NZSEE 2021 Annual Conference
Transport: Rule: 7.4.3.10 - High traffic generator Transport: Rule: 7.4.4.8 - Illumination of parking areas Transport: Rule: 7.4.4.9 - Surface of parking areass.17: Duty to landowners to avoid, remedy or mitigate adverse effects arising from activity. High threshold/test. s.29: Nuisance – accumulation or deposit which is offence or injurious to health, and/or harbours rats or other vermin, and premises which are offensive (health related) Derelict buildings; Health Act 1956 s.33: Council may issue proceedings in the District Court Temporary gravel for nuisance to be abated. Court may allow Council to carparks recover costs of doing work if owner/occupier fails to abate nuisance and Court orders Council to carry out work. Source: Christchurch City Council 3 FACTORS CONTRIBUTING TO SLOW REGENERATION The scale of destruction and loss experienced in the Canterbury earthquakes was unprecedented for New Zealand. Amidst fatalities and decimation of the CBD, emerged an opportunity to rebuild a city that is resilient. The city’s Blueprint made the CBD more compact through rezoning and strategic land acquisition. The CBD got a head start with a handful of government-led anchor projects aimed at revitalising the city. A decade after the quakes, regeneration of Christchurch remains a tale of two sides: for some progress has been too slow and other would say that a lot has happened. Numerous statistics indicate that central city is bouncing back – workers and residents are returning – but still well below the pre-earthquake levels requiring more government and private investment towards full regeneration. 3.1 Inner-city living The council has an ambitious goal of increasing inner-city population to 20,000 by 2028. Project 8011 is the Council’s initiative to creating a CBD that is compelling to ‘live, work and play’ for thousands of people. Central city is on the back foot when it comes to competing against the attraction of the suburbs just outside the CBD. The CBD is relatively small in comparison with other main urban areas, which means that within a short commute of the CBD, potential buyers are spoilt for choice with houses priced about 20% less offering better parking and access to popular schools. According to a recent REINZ report (REINZ, 2019), buyers attracted to inner-city living are making a lifestyle choice more than anything else and the location is more popular among singles and young couples with preferences for one- or two-bedroom units. In addition to higher land values, developers are factoring in more strict building requirements pertaining to central city developments into the cost of construction making housing more expensive. Using Statistics NZ definitions, we collected population summary for the last three Censuses. The central area is made up of five statistical areas (SA2), Figure 5: Boundaries of central city’s Statistical Areas 2 (SA2) (Source: Statistics NZ) Paper 187 – Re-emerging from the rubble: What is delaying regeneration of Christchurch CBD? NZSEE 2021 Annual Conference
namely Christchurch Central, Central-West, Central-East, Central-North and Central-South. Their outlines are depicted in Figure 5. During the 2006 Census, 12,960 people resided in the central city. As the city began to rebuild, the size of the population fell below 6000. In the latest Census, this number sits at around 8000 falling short of the critical mass necessary to support residential developments planned for the city. The biggest loss of population was from Christchurch Central SA2, the epicentre of destruction (Figure 6). Breaking down the population statistics into specific age groups (Figure 7), we can see that central city is popular among working age population. School-age children is the least represented group within the CBD, echoing the lack of education and recreation Figure 6: Inner-city population counts. facilities sought after by families. Across all age groups, there are signs that population is returning to the city centre but sitting below pre-earthquake levels. Council commissioned research into the attraction of inner city living (Research First, 2020), points to the unrealistic targets set by the Council. Developers operating in the market were concerned that the 2028 timeframe was too compressed for the current level of demand. Some suggestions included greater effort in the delivery of major economic initiatives aimed at attracting businesses and people, for example delivery of the Multi-Use Arena and Metro Sports Facility, both would increase hospitality offerings and provide Figure 7: Inner-city population by age group. convenient recreation options for residents. In addition, the Council should consider placing restraints on the residential developments outside of the city centre and offering greater incentives for inner-city building. 3.2 Working in the CBD The impact of the 2008-09 global financial crisis combined with the 2011 earthquake significantly altered the landscape of the central city’s economy. Just before the earthquake, employment in the CBD lost all of the additional workers it gained in the previous decade contracting to pre-2000 level (Figure 8). As the CBD began to re-open, the size of the labour market in the city centre was hovering above 22,000. After the earthquakes, central city businesses dispersed into the suburbs. This pattern of dispersion is evident in the latest 2018 Census, that shows a new trend of falling proportion of employed people commuting into Christchurch CBD from outlying suburbs and districts. For example, nearly half of working population from the neighbouring districts of Selwyn and Waimakariri worked in the CBD in 2013, this proportion fell to 38% and 32% respectively (Statistics NZ, 2020). In other words, like housing, commercial property market in the CBD is forced to compete with suburbs in a post-earthquake environment. Paper 187 – Re-emerging from the rubble: What is delaying regeneration of Christchurch CBD? NZSEE 2021 Annual Conference
Figure 8: Central city workers by SA 2, 2000 – 2020. (Source: Statistics NZ – Business Demography) Employment in the CBD has been growing steadily. Early in the rebuild, property developers re-entered the CBD helped by insurance settlements from damaged buildings, starting on the fringes of the centre as cordons progressively moved back. First developments went up along the riverfront and Victoria Street. Building in these areas are now experiencing the highest level of demand. Replacement of the commercial building stock seemed like an impossible task, with the city centre being a blank canvas, reduced to rubble. The pace of reconstruction was unprecedented (Table 3). With developments completed over the last 10 years, the stock is now at 85% of the 2010 level (Figure 9). One of the factors that contributed to the fast recovery of the building stock is the historical ownership of commercial property within the CBD being heavily skewed towards locally based high net worth investors which collectively owned over 80% of buildings and 2/3 of the total stock (EYTAS, 2012). Earlier research suggests that these investors had strong place attachment to the city and wanted to help it rebuild. Another interesting observation is that the west end of the CBD is experiencing high tenant demand with employment size in the Central-West SA2 similar to Central SA2. Table 3: CBD office construction. Year Stock added (m2) 2014 106,901 2015 142,507 2016 94,485 2017 32,637 2018 9,542 2019 1,452 2020 0 Figure 9: Inventory of Christchurch CBD office stock. Source: Colliers NZ (2020) (Source: Colliers NZ (2020) Paper 187 – Re-emerging from the rubble: What is delaying regeneration of Christchurch CBD? NZSEE 2021 Annual Conference
It is important to keep in mind that any recovery in the commercial market is not going to be fast. To give some prospective, the market experienced only moderate growth from the 1990’s leading up to the earthquakes. In the early 90’s, vacancy rates reached 30% (Figure 10). The only significant building to enter the market was a building at 250 Oxford Terrace in 2007. By then vacancies reduced but this has been helped by the removal of older office stock converting to hotels. Office rents achieved in 1989 for premium grade buildings were at $225 per sqm, by 2010 net rents only increased to $270 per sqm, which equates to an annual growth rate of less than 1%. New structural design Figure 10: Survey of office vacancies in Christchurch CBD requirements introduced after the earthquakes and (Source: Colliers NZ) the added risk margin of the uncertain outlook for the central city rebuild, meant that financial viability of new developments required rental income at $460 per sqm, on par with premium rents achieved in Auckland at that time. While businesses expressed their desire to return to the CBD, the pre- and post- earthquake rent gap was unachievable for vast majority. The CBD, however, is beginning to look more attractive to tenants currently leasing in the suburbs. Rental rates have reduced since the post- earthquake high of $450 per sqm and appear to have stabilised at $320 per sqm (Figure 11). As leases Figure 11: Comparison of suburban and CBD office rents terminate, tenants in suburban locations would be (Source: Colliers NZ) looking to shift into the CBD, since those tenants would have signed up in the suburbs in 2012/13 at rent levels not too dissimilar to the rents charged in central office precincts presently. While the current available space is absorbed, plentiful stock of suburban office space will continue to moderate the CBD rents, meaning that rents are unlikely to increase. As discussed earlier, construction costs demand rents higher than what is currently achieved in the market. Therefore, no significant new supply is expected to hit the market. In addition, the Reserve Bank’s quantitative easing aimed at stimulating the economy during COVID, resulted in low property holding costs for owners (i.e. low interest rates) providing little incentive to redevelop vacant buildings/sites and take a wait-and-see approach for the property market to turn. 3.3 Anchor projects The much anticipated rebuild blueprint for the quake-damaged Christchurch city centre was revealed to public in July 2012. The plan included 12 major anchor projects to be delivered by 2017, some have been scaled back (e.g. South Frame) while some are still waiting to break the ground (e.g. Canterbury multi-use arena). Their intention was to attract new residents, visitors, businesses, and private market-led redevelopment. Concerns around prolonged delays in turn are putting breaks on the ability of the city centre Paper 187 – Re-emerging from the rubble: What is delaying regeneration of Christchurch CBD? NZSEE 2021 Annual Conference
to attract private investments in residential and commercial construction. Timely delivery of the anchor projects is crucial in the full regeneration of the CBD as this sends a signal of commitment of the local and central governments, providing much needed certainty and confidence to the public. Having a complete picture of what the CBD would look like post-rebuild, helps define plans for developments to go around the anchor projects. Evidently, barrier sites where no active work is currently being done (i.e. plans confirmed but no work started and intentions unknown) are clustered around anchor projects that are yet to be fully completed, specifically around the East Frame, CMUA and South Frame (Figure 12). CMUA (Multi‐ use Arena) Figure 12: Location of anchor projects and barrier sites around the CBD. 4 CONCLUSION While the Council might be resorting to applying pressure on the sites lingering on the barrier sites programme, including enforcement actions ranging from a set of legally prescribed orders under the council bylaws and Acts, it is more likely that the redevelopment would be organic, market-led rather than strictly dictated by the council. Any regulatory tool can only reach so far into the strongly guarded private property rights. The Council plays an important role in addressing uncertainties of the central city redevelopment in terms of the development of the key assets for the city. Important interdependencies exist in the rebuild in the sense that developers are waiting for these key projects so that they can get underway. Their delivery will determine the speed at which the city is fully regenerated. Distraction that is barrier sites, undoubtedly, takes away council’s focus and resources from these key projects. At the same time, it is important that the negative impacts of the neglected buildings and unkempt vacant sites are contained. As the city charges towards full recovery, abandoned buildings stick out as a sign of reversing fortunes. Research links abandoned properties with increased crime, risk to public and a burden for local governments. Moreover, Paper 187 – Re-emerging from the rubble: What is delaying regeneration of Christchurch CBD? NZSEE 2021 Annual Conference
barrier sites have negative spillover effects that can spread to neighbouring properties, threatening to become the latest additions to the ‘Dirty 30’. REFERENCES Ccc.govt.nz. (n.d.). Barrier sites. [online] Available at: https://ccc.govt.nz/the-council/future-projects/barrier- sites. Christchurch City Council [CCC]. (2017). “27 May 2017 Christchurch City Council Meeting Agenda– Item 16 Central City Regeneration: Tackling Barrier Sites”. Available at: https://christchurch.infocouncil.biz/Open/2017/05/CNCL_20170525_AGN_1288_AT_WEB.htm Colliers NZ. (2020). “Property Council NZ Christchurch Market Summit Presentation 2020”. [online] Available at: https://www.colliers.co.nz/en-nz/research/colliers-pcnz-christchurch-market-summit- presentation-2020 Ernest & Young Transaction Advisory Services [EYTAS]. (2012). “CERA Christchurch central city commercial property market study – Part 2”. Available at: https://ceraarchive.dpmc.govt.nz/documents/cera- christchurch-central-city-commercial-property-market-study Newsline.ccc.govt.nz. (2017). Council releases list of central city barrier sites. 27 May 2017. [online] Available at: https://newsline.ccc.govt.nz/news/story/council-releases-list-of-central-city-barrier-sites Real Estate Institute of New Zealand [REINZ]. (2019). “Christchurch City Council research report”. [online] Available at: https://ccc.govt.nz/assets/Documents/Culture-Community/Central-City/REINZ-Real-estate- market-Christchurch-Central-City.-December-2019.pdf Research First. (2020). “Central city report” [online] Available at: https://ccc.govt.nz/assets/Documents/The- Council/Plans-Strategies-Policies-Bylaws/Plans/central-city/Research-First.-Central-City-dnd-research.- June-2020-report.PDF Paper 187 – Re-emerging from the rubble: What is delaying regeneration of Christchurch CBD? NZSEE 2021 Annual Conference
You can also read